As Serbia recovers from devastating floods in May, Belgrade has a flourishing network of young entrepreneurs taking hold. This could provide many lucrative opportunities as the country prepares to join the EU.

The images of devastation in the northwest town of Obrenovac show the scale of Serbia’s historic natural disaster. The new government of Prime Minister Aleksandar Vučić will be scrambling to readjust its spending plans for the fiscal year. Budget cuts to curb Serbia’s $1.1 billion deficit will most likely be put on hold.

But beyond the headlines of the flood and the Serbian government’s efforts to reform its public sector, there are promising signs of ingenuity and the entrepreneurial spirit taking shape as Serbia emerges from the long shadows of its isolated past.

World in Serbia, a scholarship program, allows students from the Non-Aligned Movement (NAM) member countries to study in Belgrade. This will continue to contribute to Belgrade’s growing multicultural exchange. The Crown Prince Alexander Foundation for Education and Culture hosted its second annual Startup Weekend in Belgrade. New businesses exchange ideas and receive grants. There is a growing emphasis on expanding technology in educational institutions.

The IT sector is also showing signs of dynamic markets. Telenor Sebria, a subsidiary of the Norwegian mobile telecommunications company, is starting to see fierce competition from other local operators such as VIP Mobile, Telekom Srbija and Serbia Broadband.

Competitive labor costs are attracting Fiat (and other companies) to move its automobile plant to the old industrial town of Kragujevac. The same region was once the base of the Zastava Arms manufacturer, which produced Serbian spin-offs of the infamous AK-47. After Fiat had to increase wages for local workers, the Serbian government offered the company a subsidy to pass on to workers.

Foreign investment in Serbia is also increasing. Trade with Slovenia grew by 13 percent in 2013, and exports increased by 20 percent in early 2014. Negotiations with the International Monetary Fund are ongoing. The IMF Representative for Serbia, Daehaeng Kim, said, “The new government is now in the process of formulating its economic policy, as well as making an estimate of the damage caused by the recent catastrophic floods and of the funds needed for recovery.” Talks with the IMF are expected to resume in the fall.

Serbia, however, remains a conservative society. The Serbian LGBT community has been blamed by religious figures for the flood. In addition, censorship is also still an issue as the country moves towards its goal of joining the European Union. More than once, blogs and websites have been taken down for criticizing the government’s flood relief efforts.

On the macro-level, Serbia is confidently moving towards a policy of economic liberalization. Catherine Ashton, the EU High Representative of the Union for Foreign Affairs and Security Policy, has indicated Serbia’s new government is on track for accession to the EU.

However, Serbia is walking a fine line between the geopolitical dispute between the EU and Russia over Ukraine’s sovereignty. Serbia recently recommitted to its stance on Kosovo during the NAM conference.

With Prime Minister Aleksandar Vučić’s party firmly in power in the parliament and the renewed determination for economic reform, Serbia will only momentarily be held back by the natural disaster. In the meantime, the changes rapidly unfolding on the ground will spur the government to keep up.

Author:Christopher Solomon

Christopher completed his internship with the Middle East Institute in Washington, DC and has supported several US government-funded international development programs in the Middle East and Africa throughout his professional career. He primarily writes about the Middle East, Africa, and South Asia. His focus areas include local economics and party politics, at-risk populations, and international security.
He is an avid follower of global affairs and is currently a regular contributing writer with Global Risk Insights. Christopher holds a Masters degree in Public and International Affairs from the Graduate School of Public and International Affairs (GSPIA) at the University of Pittsburgh. He studied abroad in Lebanon and worked on a volunteer project in Bolivia. Follow him on Twitter: @Solomon_Chris